MILWAUKEE COUNTY EMPLOYEES

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MILWAUKEE COUNTY EMPLOYEES RETIREMENT SYSTEM

• WELCOME TO THE RETIREMENT INFORMATION SESSION
• JULY 12, 2007

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WELCOME

• MR. JACK L. HOHREIN
• EMPLOYEES RETIREMENT SYSTEM MANAGER

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INFORMATION SESSION AGENDA
1230 115 PENSION BENEFITS Milwaukee
County Retirement Staff 115
130 QUESTIONS   130 215 HEALTH, DENTAL AND
LIFE INSURANCE Thomas MacAlpine, Cambridge
Advisory Group   215 230 BREAK   230 300
SOCIAL SECURITY AND MEDICARE Karyl Richson,
Social Security Administration   300
330 DEFERRED COMPENSATION Marco Gruchalski,
Great West Retirement Services   330
430 QUESTIONS
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OVERVIEW OF ERS PRESENTATION

• ERS Staff
• Pension Board Members and ERS History
• Membership in ERS
• Reciprocity
• Funding
• ERS Benefits
• ERS Distributions and Forms of Payment
• Backdrop
• Pension Calculation
• Retirement Process

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MILWAUKEE COUNTY EMPLOYEES RETIREMENT SYSTEM

• WHO WORKS IN RETIREMENT AND WHAT DO THEY DO?

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MILWAUKEE COUNTY RETIREMENT STAFF

• Jack Hohrein
• Retirement System Manager/Pension Board
  Secretary
• Gordon Mueller
• Fiscal Officer
• Administrative Specialists
• Vivian Aikin
• Robert Shupe
• Denise McCaskill

• Veronica Britt
• Retirement System Coordinator
• Clerical Specialists
• Tracy Jackson

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MILWAUKEE COUNTY EMPLOYEES RETIREMENT SYSTEM

• WHAT IS THE HISTORY AND STRUCTURE OF MILWAUKEE
  COUNTYS ERS?

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PENSION BOARD MEMBERS

• 5 Citizen Members
• Linda Bedford
• Donald Cohen
• Michael Ostermeyer
• Sarah Peck
• Thomas Weber
• 3 Employee Members
• Dean Roepke (Chairman)
• John Martin
• John Parish
• 1 Member Elected by Retirees
• Marilyn Mayr

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ROLE OF THE PENSION BOARD

• Monitor Investment of Funds
• General Administration
• Proper Operation of ERS

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MILWAUKEE COUNTY RETIREMENT SYSTEM HISTORY

• ERS (Employee Retirement System) Established in
  1937
• OBRA (Omnibus Budget Reconciliation Act)
  Established in 1992
• Pension Board established in 1937
• Milwaukee County General Ordinance Chapters 201
  and 203
• Milwaukee County Retirement Rules Appendix B and
  B1

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MILWAUKEE COUNTY EMPLOYEES RETIREMENT SYSTEM

• HOW DO I BECOME A MEMBER OF THE ERS?

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MEMBERSHIP

• ERS is Milwaukee Countys primary
• retirement system
• ERS participation is automatic with
• the exception of
• Excluded employees (i.e., board and commission
  members)
• Optional employees
• Seasonal employees
• These employees participate in OBRA and can
  contact
• ERS at 414-278-4143 for details

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MILWAUKEE COUNTY EMPLOYEES RETIREMENT SYSTEM

• WHAT IS RECIPROCITY AND WHO IS ELIGIBLE?

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RECIPROCITY

• Special provisions are available for individuals
  who have participated in either of these
  systems
• State of Wisconsin Retirement System
• City of Milwaukee Employees Retirement System
  (City/County Transfer)
• Pension credits in one or more of these systems
  may increase your total benefits payable from
  Milwaukee County
• Members with credits in either of these systems
  should contact Milwaukee County ERS at
  414-278-4143 for additional information

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MILWAUKEE COUNTY EMPLOYEES RETIRMENT SYSTEM

• IF I GET LAID OFF HOW DOES IT AFFECT MY
  RETIREMENT?

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LAY-OFFS

• If eligible for retirement contact ERS
  immediately for retirement date planning
• Retirement applications must be
• completed while in active employment status
• Deferred Retirements non-eligible for
• Backdrop
• Rule of 75

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MILWAUKEE COUNTY EMPLOYEES RETIREMENT SYSTEM

• HOW IS THE ERS FUNDED?

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FINANICAL INFORMATION
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CUSTODIAN

• Pension Board has the authority to select a
  custodian
• Pension Board had delegated custody to Mellon
  Trust

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ERISA

• EMPLOYEE RETIREMENT INCOME SECURITY ACT
• ERISA imposes funding, vesting disclosure and
  fiduciary requirements on certain pension plans
• ERISA does not apply to governmental plans (i.e.,
  ERS and OBRA)
• ERISA guidance may be helpful in some contexts

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TAX QUALIFICATION

• One of the IRS requirements is Code 415
• Favorable determination letter
• Internal Revenue Code (The Code) and Treasury
  Regulations contain requirements for tax
  qualification
• Importance of tax qualified status
• IRS tax ID Number 39-6146761

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FINANICAL SUMMARY

• Healthy Plan
• High Quality Custodian
• Tax Qualified

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MILWAUKEE COUNTY EMPLOYEES RETIREMENT SYSTEM

• WHAT BENEFITS ARE OFFERED BY THE ERS?

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ERS BENEFITS

• Death Benefit
• Payable upon death of an active employee
• Disability Benefits
• Accidental (injury on the job at specific time
  and place
• Ordinary (mentally or physically incapacitated
  for duty)
• Special provisions apply for Deputy Sheriffs
  killed in the line of
• duty

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ERS BENEFITS CONTD

• Separation Benefits
• Withdrawal of contributions (prior to 1971)
• Deferred vested benefits status
• Monthly Annuity Benefit (normal retirement
  allowance)

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MILWAUKEE COUNTY EMPLOYEES RETIREMENT SYSTEM

• HOW DO I BECOME ELIGIBLE FOR RETIREMENT AND WHAT
  TYPE OF PENSION BENEFIT WILL I RECEIVE?

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PENSION BENEFITS

• Normal retirement pension
• Employment terminates on or after age 55 and 30
  years of service
• Employment terminates on or after age 60
• Rule of 75 (special rules apply for reciprocity)
• Early retirement pension
• Employment terminates on or after age 55 and 15
  years of service
• Reduced monthly benefits

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PENSION BENEFITS (CONTD)

• Deferred vested retirement pension
• Eligibility requirements
• May begin at normal retirement age or, if
  earlier, at age 55, if member has 15 years of
  service
• Accidental disability retirement
• Disabled as the result of a work-related injury
• Other eligibility requirements apply
• Payable at 60 or 75 of FAS (Final Average
  Salary) unless normal pension is greater

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PENSION BENEFITS (CONTD)

• Ordinary disability retirement
• Disabled as the result of a non-work-related
  injury or illness
• Other eligibility requirements apply
• 15 years of service credit
• Payable at 25 of FAS unless normal pension is
  greater

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PENSION BENEFITS (CONTD)

• Survivor benefits (Spouse and children)
• Sheriffs
• Others

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MILWAUKEE COUNTY EMPLOYEES RETIREMENT SYSTEM

• WHAT ARE THE FORMS OF DISTRIBUTION AND WHAT
  OPTIONS DO I HAVE?

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ERS FORMS OF DISTRIBUTION

• Normal form of benefit is an annuity for the
  members lifetime
• Before benefits begin, a member may select a form
  of payment under ERS

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FORMS OF PAYMENT

• Maximum Benefit
• This is the maximum benefit allowed
• No beneficiary is designed when the maximum is
  chosen
• Option 1 Reduced monthly benefit for life of
  member upon members death beneficiary gets any
  amount remaining in members membership account

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FORMS OF PAYMENT CONTD

• Option 2 50 joint and survivor annuity
• Option 3 100 joint and survivor annuity
• Option 4 25 joint and survivor annuity
• Option 5 75 joint and survivor annuity

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FORMS OF PAYMENT (CONTD)

• Option 6 10 year certain annuity
• Option 7 A member can apply to receive benefits
  in any other form
• Subject to Pension Boards approval
• Rule 1013 describes process
• The Pension Board has restricted lump sum
  requests and joint surviors options less than 25
• Members will incur fees for option 7 request that
  require actuarial calculations

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MILWAUKEE COUNTY EMPLOYEES RETIREMENT SYSTEM

• WHAT IS A BACKDROP AND WHO IS ELIGIBLE FOR IT?

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BACK DROP BENEFIT

• Eligibility Requirement
• Must be eligible for an early or normal
  retirement
• Eligibility dates are determined by union
  contract agreements
• Must work one year beyond eligibility date
• Special rules for represented employees
• 2-Part Benefit
• Lump sum DROP benefit
• Monthly DROP benefit

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MILWAUKEE COUNTY EMPLOYEES RETIREMENT SYSTEM

• HOW IS MY PENSION CALCULATED?

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ERS PENSION CALCULATION

• Calculation of Normal Pension Benefit (General
  Formula)
• General formula takes into account FAS, years of
  service and multiplier (i.e, 1.5 of FAS x years
  of service)
• Other Factors Include
• 80 of FAS maximum
• Post retirement adjustments

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ERS PENSION CALCULATION

• Calculation of Normal Pension Benefit
  (Recruitment and Retention Incentives)
• Recruitment and retention incentives may increase
  Normal Pension Benefit
• Recruitment and retention incentives include
• Pension benefit multiplier
• Bonus to FAS
• Backdrop

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PENSION BENEFIT MULTIPLIER

• Eligibility Requirements
• General eligibility rule initial ERS membership
  began on or after 1/1/82
• Special eligibility rules for represented
  employees, non-represented deputy sheriffs and
  elected officials
• Pension multiplier is credited with an additional
  .5 of members FAS
• Only applies to certain years of service credit
• 80 of FAS limit applies

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FAS BONUS

• Eligibility Requirements
• General eligibility rule initial ERS membership
  began prior to 1/1/82
• Special eligibility rules for represented
  employees and non-represented deputy sheriffs
• FAS is increased by 7.5 for each year of pension
  service earned after 1/1/01
• Maximum of 25 of pre-bonus FAS
• 80 of FAS limit applies

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MILWAUKEE COUNTY EMPLOYEES RETIREMENT SYSTEM

• WHAT STEPS DO I TAKE IF I AM THINKING ABOUT
  RETIREMENT?

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RETIREMENT CALCULATOR

• Milwaukee County Intranet Site (http//172.31.1.4/
  MCnet)
• Fields to be entered
• Social Security Number
• Last Day of Pay
• Backdrop Date (Optional)
• Beneficiary Birth Date

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REQUESTING AN ESTIMATE

• Estimate Request Provided
• Within six months of anticipated retirement date
• Request mailed to your home within three to four
  weeks of your request
• Contact ERS
• Phone [phone]), letter or email
• Information Needed
• Social Security Number
• Estimated date of retirement
• Beneficiary Date of Birth
• Contact Information
• Backdrop date

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SICK ALLOWANCE

• In accordance with current union contracts and
  ordinances
• Exception for deputy sheriffs
• Pension service credit
• Separate lump sum check less taxes
• Taxed at 39.15
• Sick pay cannot be rolled over into an IRA
• Eligible employees who die (while working) their
  sick allowance is paid in a lump sum to the
  spouse/designated beneficiary

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VACATION TIME

• Vacation Time
• Personal Time
• Accrued Overtime
• Accrued Holiday
• May be run out in bi-weekly payments
• Paid in lump sum less taxes (39.15)
• End of year retirements do not require you to
  work into the new year
• If you have full pay up to the end of year,
  vacation time, three personal days, and holidays
  (up to retirement date) will be granted for the
  new year (If bi-weekly payments were
  chosen)

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ERS INDIVIDUAL RETIREMENT SESSION

• Scheduled 2nd Tuesday of each month
• Sick Allowance/Vacation Payout (if applicable)
• Retirement Option Chosen
• Beneficiary Designation
• Official Retirement Date
• Federal and State Withholdings (W4P)
• Direct Deposit
• Date of 1st Pension Check
• Date of Backdrop Check (if applicable)

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PENSION CHECK

• The 1st retirement check is mailed the the 3rd
  week of the following month in which you retire
• Checks are mailed one day before the last
  business day of each month
• Direct deposits are deposited on the last
  business day of each month. Effective July 1,
  2007, all retirees were required to have their
  checks directly deposited
• Annual Increase (2 of your original pension
  amount on the anniversary of your retirement)

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THANK YOU

• ERS STAFF

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QUESTIONS